Western Bay of Plenty District Council has approved its draft 2011/12 Annual Plan and is seeking comment from the public during the consultation period 1 April to 2 May 2011.

The draft plan sets out the money needed to carry out work in the 2011/12 financial year (1 July 2011-30 June 2012).

Western Bay of Plenty District Council Mayor Ross Paterson says the upcoming financial year is not going to be easy.

Council expects to receive income of $47.4 million for the financial year – compared to $44.3 million in the 2010/11 year.

Mayor Ross Paterson says the council is facing its toughest year fiscally since it was established in 1989 and $3.5 million in savings has had to be found to avoid placing an undue burden on ratepayers.

The continuing economic downturn, a dramatic slowdown in district-wide growth and a shortfall in growth related income to fund council's debt has put enormous pressure on the council to cut expenditure.

The harshest hit on council's budget has been the reduction in income that council receives through financial contributions – payments made by developers when they subdivide a property.

Council carries a total debt of $140 million of which $92 million is for growth related projects.

Prior to the downturn council had budgeted for $12 million in financial contributions from growth related projects.

In 2009/10 council received just over $5 million in financial contributions, and for the 2011/12 year $3.5 million is expected.

As a result, council has more debt than planned, so interest costs will be much higher too.

'We have had to take a very hard line on what council can afford to fund over the next two years.

'This has meant council deferring $7.5 million of capital works and cutting operational expenditure by $2.4 million, of which $1 million is slashed from internal spending,'' says Ross.

'By deferring capital works and cutting operational expenditure we have managed to keep rate increases to a minimum.

'A significant change this year will see uniform annual charges for water and wastewater rise by 10 percent.

'The logic for this is that the greatest debt lies in the water and wastewater infrastructure that council has put in place over the past 10 years to cater for projected growth.”

The proposed total rates for 2011/12 will see ratepayers in urban communities (Waihi Beach, Katikati, Omokoroa, Te Puke and Maketu) pay varying amounts depending on the uniform annual charges (UACs) for water, wastewater, stormwater and solid waste. There will be no increase in the roading rate.

Maketu is expected to face the biggest rate rise due to the start of charges for the proposed wastewater scheme for Maketu and Little Waihi.

A decision on whether council proceeds with this scheme will be made in late March.

Ross says the draft also sees a move by council to fund costs on a district-wide basis for the Waihi Beach boundary change proposal.

In January this year the Local Government Commission determined the proposal to transfer Waihi Beach ward from the Western Bay to Hauraki District would not promote good local government.

The proposal stemmed from a petition signed by a number of registered electors in Waihi Beach calling for a change in governance arrangements for the ward.

'The Local Government Commission's determination followed a year long process that involved a huge amount of work by Council to meet the requirements of legislation associated with the boundary change process and the petition,” says Ross.

'Council did consider funding the approximately $200,000 in unbudgeted costs from the Waihi Beach ward, however, resolved to fund them from across the district.”

Despite the tough road ahead, Ross says council's balance sheet is sound and its ‘A+' credit rating secure.

'This draft annual plan is a ‘hold and maintain' strategy without putting at risk the integrity of essential services needed across the district.

'I encourage ratepayers to take part in the consultation period and help council find its way through the challenging times ahead,” says Ross.

Council will send a summary of the draft annual plan to all ratepayers on Friday, March 25.

The summary will include detailed information of what rates each property can expect to pay and will itemise projects that have been deferred.

Submissions open on April 1 and close on May 2 and will be considered before the draft plan is adopted by council in late June.